18 Dec

Housing Rebound in November!

General

Posted by: Jeannie Stace-Smith

Lets hope the trend continues!!!!!

NOVEMBER DATA CONFIRM CANADIAN HOUSING REBOUND

Statistics released today by the Canadian Real Estate Association (CREA) show that national home sales rose for the ninth consecutive month and now stands a full 20% above the six-year low reached in February 2019. While the chart below shows that monthly home sales are now well above their 10-year average, they remain 6%-to7% below the record pace posted in 2016 and 2017.
There was an almost even split between the number of local markets where activity rose and those where it declined. Higher sales across much of British Columbia and in the Greater Toronto Area (GTA) offset a decline in activity in Calgary.
Actual (not seasonally adjusted) activity was up 11.3% year-over-year in November. Transactions surpassed year-ago levels in almost all of Canada’s largest urban markets.

“Sales continue to improve in some regions and not so much in others,” said Jason Stephen, president of CREA. “The mortgage stress-test doesn’t help relieve the ongoing shortage of housing in markets where sales have improved, and it continues to hammer housing demand in markets with ample supply.”

According to Gregory Klump, CREA’s Chief Economist, “Home prices look set to continue rising in housing markets where sales are recovering amid an ongoing shortage of supply. By the same token, home prices will likely continue trending lower in places where there’s a significant overhang of supply, perpetuated in part by the B-20 mortgage stress-test that continues to sideline homebuyers there.” Weakness continues to be most evident in Alberta and Saskatchewan where the economy has been hard hit by lower commodity prices and delinquency rates have edged upward.

New Listings
The number of newly listed homes slid a further 2.7%, putting them among the lowest levels posted in the past decade. November’s decline was driven primarily by fewer new listings in the GTA.
Slightly higher sales and a drop in new listings further tightened the national sales-to-new listings ratio to 66.3%, which is well above the long-term average of 53.7%. If current trends continue, the balance between supply and demand makes further home price gains likely.

Market balance measures that are within one standard deviation of their long-term average are generally consistent with balanced market conditions. Based on a comparison of the sales-to-new listings ratio with the long-term average, just over half of all local markets were in balanced market territory in November. That list includes the GTA and Lower Mainland of British Columbia, but market balance there is tightening. By contrast, an oversupply of homes relative to demand across much of Alberta and Saskatchewan means sales negotiations remain tilted in favour of buyers.

Meanwhile, an ongoing shortage of supply of homes available for purchase across most of Ontario, Quebec and the Maritime provinces means sellers there hold the upper hand in sales negotiations. There were just 4.2 months of inventory on a national basis at the end of November 2019 – the lowest level recorded since the summer of 2007. This measure of market balance has been retreating further below its long-term average of 5.3 months. While still just within balanced market territory, its current reading suggests that sales negotiations are becoming increasingly tilted in favour of sellers.

National measures of market balance continue to mask significant and increasing regional variations. The number of months of inventory has swollen far beyond long-term averages in Prairie provinces and Newfoundland & Labrador, giving homebuyers ample choice in these regions. By contrast, the measure is running well below long-term averages in Ontario, Quebec and Maritime provinces, resulting in increased competition among buyers for listings and providing fertile ground for price gains. The measure is still within balanced market territory in the Lower Mainland of British Columbia but is becoming increasingly tilted in favour of sellers.

Home Prices

The Aggregate Composite MLS® Home Price Index (MLS® HPI) rose 0.8%. Marking its sixth consecutive monthly gain, it now stands almost 4% above its low point reached last May. The MLS® HPI in November was up from the previous month in 14 of the 18 markets tracked by the index. (Table 1)
Home price trends have generally been stabilizing in the Prairies in recent months. While that remains the case in Calgary, Edmonton and Saskatoon, prices in Regina have again moved lower. By contrast, home price trends have clearly started to recover in the Lower Mainland of British Columbia. Meanwhile, prices continue to rebound in the Greater Golden Horseshoe (GGH) region while continuing to trend higher in housing markets to the east of it.
Comparing home prices to year-ago levels yields considerable variations across the country, with a mix of gains and declines in western Canada together with price gains in eastern Canada.
The actual (not seasonally adjusted) Aggregate Composite MLS® (HPI) was up 2.6% y-o-y in November 2019, the biggest year-over-year gain since March 2018.
Home prices in Greater Vancouver (-4.6%) and the Fraser Valley (-2.9%) remain below year-ago levels but declines are shrinking. Elsewhere in British Columbia, home prices logged y-o-y increases in the Okanagan Valley (+1.4%), Victoria (+1.5%) and elsewhere on Vancouver Island (+2.8%).
Calgary, Edmonton and Saskatoon posted price declines of around -2% y-o-y, while the gap widened to -5.5% y-o-y in Regina.
In Ontario, price growth has re-accelerated well ahead of overall consumer price inflation across most of the GGH. Meanwhile, price growth in recent years has continued uninterrupted in Ottawa, Montreal and Moncton.
All benchmark home categories tracked by the index accelerated further into positive territory on a y-o-y basis. Two-storey single-family home prices posted the biggest increase, rising 2.8% y-o-y. Price gains were almost as strong for apartment units (+2.6% y-o-y) and one-storey single-family homes (+2.5% y o y), while townhouse/row prices climbed a more modest 1.5% compared to November 2018.

DR. SHERRY COOPER
Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.
16 Dec

Here are some tips to reduce holiday stress!!!

General

Posted by: Jeannie Stace-Smith

15 Ways to Reduce Holiday Stress

15 Ways to Reduce Holiday Stress

11 MINUTE READ

It’s no secret that things can get overwhelming around the Christmas season. According to a survey by Healthline, 62% of people said their stress level increases during the holiday season.(1)And it’s kind of easy to see why.

The more strain you put on yourself, your family and your wallet, the less room you’ll have to truly enjoy the magic of the season. Remember, this time of year should be joyful! Don’t cave in to the holiday stress! Here are 15 ways to keep the merry in Christmas and have a slow holiday you can savor.

1. Make a to-do list.

And check it twice too. That’s what the pros like Santa do. Maybe you have a mental list of everything you need to do and when you need to do it. But it helps to have a written list or calendar to see the big picture. If your shopping needs to be done by a certain date, write that down. If your neighbors have a yearly bash on the second Saturday of December, write that down.

The point of this is to see everything in one place so you can get an idea of what’s happening and when. Don’t like how it’s looking? Reorganize your calendar and your to-do list to reflect the Christmas you want to have this year.

Ready to start saving? Download our free budgeting tool today!

2. Avoid too many commitments.

Most likely, your December schedule is sure to include party invitations out the chimney. But you don’t have to do everything on your calendar. You are in control! Remember, you can’t be everywhere at the same time. You can only attend so many family dinners, drive so far, and give so much. Just like your money, you have limits with your time.

Be honest and reasonable about what you can handle, and speak up if it’s too much to juggle. Instead of going to five Christmas gatherings, pick one or two. You don’t want to burn out before Christmas Day even gets here! Prioritize your family’s time and only commit to what you want to do. It’s all about quality, not quantity.

Don’t let too many commitments throw your daily routine out of whack. Stick to your rituals and try to keep as much of your normal routine in place as you can during the scattered schedule of the Christmas season. If your average day starts with getting up, pouring yourself a cup of coffee, and reading the newspaper, don’t skip that. Having some normalcy can help keep you calm and focused on the day ahead. Plus, it’s a great way to stay level-headed . . . especially if your house is filled to the brim with guests for the holidays.

3. Don’t wait until the last minute.

Delaying something until the last minute is rarely a good idea. Christmas shopping is the perfect example of that! A lot of people wait until halfway through December and then dash to the malls in a panic to buy gifts. But the good news is, you’re starting early! Aren’t you feeling more relaxed already? You probably just added five years to your life!

Trying to do all your Christmas shopping or cooking in one weekend can push you over the edge. Instead, keep it simple! It might be easier to shop for one or two people on your list each day. The idea here is to have fun buying gifts for others and not make it feel like a chore.

Make a Christmas bucket list and fill it with fun and festive things to do throughout the season. That way, you’re making Nana’s Christmas cookie recipe at the beginning of the month instead of trying to cram it in on Christmas Eve. You can even freeze cookie dough ahead of time and pull it out when you’re ready to bake. Spacing things out during the season can help you stay in the Christmas spirit and keep the holiday stress low!

4. Make a Christmas budget.

You saw this one coming, right? No shocker here: We’re reminding you to do your Christmas budget, again. So have you done it yet? Take some time to think about all your Christmas expenses and decide exactly how much you will spend.

Make a plan and don’t blow it! Avoid all the impulse spending, and when you max out your budget, that’s it. You’re done.

Be sure to include all the parties you want to go to and the cost of gifts, food and decorations. Despite all of the holiday hoopla, stick to your plan no matter what! If you haven’t done your budget yet, what are you waiting for? Get our free budgeting tool, EveryDollar! It can help you stay on track to meet your goals this Christmas.

5. Decorate like a minimalist.

We all like to be just as festive as the next guy. No one wants to be a Grinch. But don’t feel like you have to put up a Christmas tree in every room of your house. This isn’t Whoville.

Instead of decorating the entire house, keep it simple by decorating the tree and the mantel. Focus on your main living spaces where your family gathers most often. Take some of the pressure off yourself and ignore the urge to create a winter wonderland inside (or outside) your home this year.

6. Don’t spend all your time on social media.

Stay away from the comparison trap, especially at Christmastime. Hide your eyes from the perfectly curated Instagram feeds and the DIY rabbit hole of Pinterest.

Don’t waste this joyous time of year apologizing to your friends and family because you didn’t bake every item from scratch or create an elaborate story each day for that pesky Elf on the Shelf! Ramsey Personality Rachel Cruze has a really great take on this in her book, Love Your Life, Not Theirs. Rachel says, “I’ve come to realize that when we start comparing ourselves to other people, we’re playing a game we’ll never win.”

7. Get rid of clutter before Christmas.

It’s out with the old and in with the new. No one wants to feel like their house is a cluttered mess with new gifts piled on top of old ones. So get rid of the clutter before Christmas gets here. For every new toy that you know the kids will open on Christmas morning, get rid of two. Make your kids a part of it so they know they’re donating their well-loved toys to others.

This is also a great time to sort through and organize your clothes, garage and kitchen (even those ratty Christmas decorations in the attic you’re still clinging to). Sell or donate the stuff you know you don’t use anymore, or wrap some of it up for gag gift exchanges.

8. Don’t shop at peak times.

Shop early, shop early, shop early. Since you started saving for Christmas early, you can shop early too. You’ll never have to worry about inventory being too low and having to stoop to tug of war with another desperate parent over the last Turbo Man action figure. Phew! You won’t have to worry about price gouging on popular items either.

If you can swing it, do a babysitting swap with a couple you know. They’ll watch your kids for a few hours and you can return the favor and watch their kids for a few hours when they need to go out. Everyone wins! You and your spouse can have a free evening together to go shopping—kid-free! Make the welcome escape a little date night for the two of you too. Grab some peppermint mochas and go Christmas shopping. You both deserve some one-on-one time.

Or keep your holiday stress level at bay and do all your Christmas shopping online. There’s nothing wrong with that! Plus, being able to see the item prices in your cart can help keep you from overspending. And you’ll probably save a bundle with all those coupon codes offered online: win-win! On top of that, you’ll have plenty of time for things to arrive at your front doorstep—no paying $45 for overnight shipping for you!

9. Ask friends or family for help.

Some stuff just has to be done. You can’t get rid of everything on the list. But if you start feeling the pressure, consider enlisting some friends or family to help you out.
Maybe that’s trading off with a fellow parent to cart your kids to and from Christmas pageant rehearsals, paying your niece or nephew to wrap all your presents (well, the ones that aren’t theirs), or picking up store-bought cheesecake for your Christmas potluck at work. Whatever it is, just make sure it’s in your budget, and get ready to feel the holiday stress melt away.

10. Avoid family conflict.

Okay, we know this one is tricky to navigate, especially around the holidays, but stick with us here. We all have family members who push our buttons: Aunt Betsy, in-laws, Granny Gertrude—whoever! Instead of going to the family event and trying to master the fine art of not stepping on egg shells the entire night, how about just avoiding certain topics and removing yourself from the conversation if things go south?

Believe it or not, it can be done. You don’t have to subject yourself or your family to a heated argument you don’t want to be in—boundaries, you know?

11. Host a potluck.

Just because it’s Christmastime, that doesn’t mean you have to stress yourself out making a full-on feast for the masses. Scale things back and reduce your stress level with a potluck dinner! Trust us. It isn’t as cringeworthy as it might sound. Have each one of your guests bring their favorite side dish or family recipe to the meal. Then all you have to worry about preparing is the turkey (or ham . . . or fish . . . or partridge in a pear tree.)

12. Don’t overeat.

Yes, it’s true: You can have too much of a good thing. Stressed spelled backward is desserts. If you cut back on all the holiday stress, then maybe your waistline will thank you too. You can still indulge in the sweet stuff. Just don’t go overboard. At least try to eat a little better than Buddy the Elf’s diet of candy, candy canes, candy corns and syrup.

And don’t forget about exercise! It can help keep the Christmas pounds off and lower your holiday stress level. If you can’t make time to get to the gym, make time to move. Take the stairs at work. Get up every hour or so and take a lap around the office. Lift small weights while you’re on the phone or watching television. You can even bundle up and go on your own Christmas lights walking tour. Maybe your exercise is just combining your Christmas shopping with walking in the mall. Anything is better than nothing!

13. Stay healthy.

Being sick at Christmastime is the absolute worst, so do what you can to avoid it! If you wash your hands, stay hydrated, and avoid sick people, you can make it through cold and flu season safe and sound. P.S. Hand sanitizer is your best friend. Also, don’t burn the candle at both ends by staying up late and getting up early. Make sure you’re getting enough sleep this season.

Remember, stress can zap your immune system and make you more prone to catching those gnarly bugs. Keep the stress down and your spirits up by staying healthy this season.

14. Make time for downtime.

Keep your peace and quiet, and you’ll keep your sanity. It really doesn’t matter what part of the day it is—the early morning hours or the evening when the kids are asleep. Just make time to enjoy the things you love. Read a book. Do a Christmas devotional or Advent plan. Catch up on your favorite Netflix shows. Or dive into one of those cheesy (but you can’t look away) Hallmark Christmas movies.

15. Remember what the Christmas season is about.

Christmastime is meant to be filled with joy, merriment and thankfulness. Carve out time with family and friends to reconnect with one another. You want to actually remember Christmas this year, right? The idea is to be intentional. Don’t let the month go by in a total blur.

Slow down and think about what you really want to do this season. Don’t get so caught up in the hustle and bustle that you forget to enjoy the people you’re doing all this for. By starting early, you’ll be able to have a merry—and much less stressful—Christmas!

Dave Ramsey

11 Dec

Everything you need to know about Down Payments!

General

Posted by: Jeannie Stace-Smith

Looking to buy your first home…Maybe you are upsizing or downsizing!

Awesome information on down payments below!

HOW TO VERIFY YOUR DOWN PAYMENT WHEN BUYING A HOME

Saving for a down payment is one of the biggest challenges facing people wanting to buy their first home.
To fulfill the conditions of your mortgage approval, it’s all about what you can prove (hard to believe – but some people have lied in the past – horrors!).
Documentation of down payment is required by all lenders to protect against fraud and to prove that you are not borrowing your down payment, which changes your lending ratios and potential your mortgage approval.

DOCUMENTATION REQUIRED BY THE LENDER TO VERIFY YOUR DOWN PAYMENT

This is a government anti-money laundering requirement and protects the lender against fraud.

1. Personal Savings/Investments: Your lender needs to see a minimum of 3 months’ history of where the money for your down payment is coming from including your: savings, Tax Free Savings Account (TFSA) or investment money.

  • Regularly deposit all your cash in the bank, don’t squirrel your money away at home. Lenders don’t like to hear that you’ve just deposited $10,000 cash that has been sitting under your mattress. Your bank statements will need to clearly show your name and your account number.
  • Any large deposits outside of “normal” will need to be explained (i.e. tax return, bonus from work, sale of a large ticket item). If you have transferred money from once account to another you will need to show a record of the money leaving one account and arriving in the other. Lenders want to see a paper trail of where your down payment is coming from and how it got into your account.

 

2. Gifted Down Payment: In some expensive real estate markets like Metro Vancouver & Toronto, the bank of Mom & Dad help 20% of first time home buyers. You can use these gifted funds for your down payment if you have a signed gift letter from your family member that states the down payment is a true gift and no repayment is required.

  • Gifted down payments are only acceptable from immediate family members: parents, grandparents & siblings.
  • Be prepared to show the gifted funds have been deposited in your account 15 days prior to closing. The lender may want to see a transaction record. i.e. $30,000 from Bank of Mom & Dad’s account transferred to yours and a record of the $30,000 landing in your account. Bank documents will need to show the account number and names for the giver and receiver of the funds. Contact me for a sample gift letter.

3. Using your RRSP: If you’re a First Time Home Buyer, you may qualify to use up to $35,000 from your Registered Retirement Savings Plan (RRSP) for your down payment.

  • Home Buyers Plan (HBP): Qualifying home buyers can withdraw up to $35,000 from their RRSPs to assist with the purchase of a home. The funds are not required to be used only for the down payment, but for other purposes to assist in the purchase of a home.
  • If you buy a qualifying home together with your spouse or other individuals, each of you can withdraw up to $35,000.
  • You must repay all withdrawals to your RRSP’s 15 years. Generally, you will have to repay an amount to your RRSP each year until you have repaid the entire amount you withdrew. If you do not repay the amount due for a year (i.e. $35,000/15 years = $2,333.33 per year), it will be added to your income for that year.
  • Verifying your down payment from your RRSP, you will need to prove the funds show a 3-month RRSP history via your account statements which need to include your name and account number. Funds must be sitting in your account for 90 days to use them for HBP.

4. Proceeds from Selling Your Existing Home: If your down payment is coming from the proceeds of selling your currently home, then you will need to show your lender an accepted offer of Purchase and Sale (with all subjects removed) between you and the buyer of your current home.

  • If you have an existing mortgage on your current home, you will need to provide an up-to-date mortgage statement.

5. Money from Outside Canada: Using funds from outside of Canada is acceptable, but you need to have the money on deposit in a Canadian financial institution at least 30 days before your closing date.  Most lenders will also want to see that you have enough funds to cover Property Transfer Tax (in BC) PLUS 1.5% of the purchase price available in your account to cover your closing costs (i.e. legal, appraisal, home inspection, taxes, etc.).

  • Property Transfer Tax (PTT) All buyers pay Property Transfer Tax (except first-time buyers purchasing under $500,000 and New Builds under $750,000). This is a cash expense, in addition to your down payment.
    Property Transfer Tax (PTT) cannot be financed into the mortgage

Buying a home for the first time can be stressful, therefore being prepared with the right documentation for your down payment and closing costs can make the process much easier.
Mortgages are complicated, but they don’t have to be. Contact a Dominion Lending Centres mortgage professional near you.

KELLY HUDSON
Dominion Lending Centres – Accredited Mortgage Professional
Kelly is part of DLC Canadian Mortgage Experts based in Richmond, BC.
4 Dec

Bank of Canada Holds Rate Steady!

General

Posted by: Jeannie Stace-Smith

BANK OF CANADA HOLDS STEADY AMID CONTINUED TRADE UNCERTAINTY

The Bank of Canada maintained its target for the overnight rate at 1.75% for the ninth consecutive policy announcement, keeping the key interest rate stable for all of 2019. Today’s decision was widely expected as members of the Governing Council have signalled that the Bank is satisfied with the performance of the Canadian economy.

The Bank of Canada is one of a shrinking number of central banks that has not eased interest rates this year. Roughly 40 central banks have cut interest rates, most notably the US Federal Reserve, which has cut rates three times this year.

The statement was undoubtedly less dovish (i.e., consistent with a rate cut) than in October, noting that there are signs that the global economy is stabilizing, though trade remains the most significant downside risk to the outlook. On inflation, the expectation is for a continued run around the target 2% rate, though gasoline prices will cause some headline volatility over the coming months. Finally, “Governing Council judges it appropriate to maintain the current level of the overnight rate.”

While the risks to the outlook for the BoC remain skewed toward a rate cut, it doesn’t look like policymakers are in any hurry to move at this point.

The BoC does remain concerned about the global backdrop and potential risks for the domestic economy. In recent days, stock markets have sold off sharply as President Trump opined that a US-China trade deal is not likely ant time soon.

The White House has lately threatened a new round of tariffs on many countries, including Canada, and warned of a possible reinstatement of steel/aluminum tariffs on Brazil and Argentina. The United States threatened tariffs on US$2.4-billion of French imports in retaliation against a French digital services tax, raising concerns in Canada that Justin Trudeau’s minority government will also face backlash from Washington if it proceeds with a campaign promise to impose a similar levy. US businesses have complained that the Canadian tax proposal would violate the intentions of the new North American Free Trade Agreement — called the U.S. Mexico Canada Agreement or USMCA — which allows for digital levies but prohibits discriminatory tax treatment. The deal is currently awaiting ratification in the US, where Congressional Democrats have been demanding changes to labour and environmental provisions.

On the domestic front, the central bank believes that the underlying details of the as-expected slowing in Q3 GDP were decidedly more positive than the headline 1.3% growth rate suggested and highlighted the stronger than expected rise consumer spending, housing and business investment. The press release stated that “housing investment was also a source of strength, supported by population growth and low mortgage rates. The Bank continues to monitor the evolution of financial vulnerabilities related to the household sector.” Housing was robust in Q3, accompanied by a re-acceleration in mortgage credit. While the BoC seems comfortable with this evolution, it will be monitoring credit growth.

Labour markets have been robust, inflation has been locked right around the 2% target range, and wage growth has strengthened. While growth headwinds remain, the bank is balancing these risks against those associated with re-inflating household credit growth (mostly via recovery in housing markets) from levels that the BoC has argued are already worryingly high.

“Fiscal policy developments will also figure into the Bank’s updated outlook in January.” Tomorrow’s Throne Speech is vital for the Bank of Canada. Governor Poloz said in October that $5 billion in fiscal stimulus is roughly equivalent to a 25 basis point rate cut. It looks as though the BoC would prefer that fiscal rather than monetary policy do the heavy lifting to offset the headwinds from the global trade war.

Bottom Line: Governor Poloz appears to be satisfied with his stand-pat policy with only six months left in his term as Governor. Today’s statement was much more sanguine than the more cautious tone struck in October. The risks around the economic outlook remain skewed to the downside and, while the same can be said for policy rates, some anticipated fiscal stimulus will likely provide the Bank of Canada with some breathing room. Barring a negative shock to the economy, it looks like the BoC could be on hold for some time yet.

DR. SHERRY COOPER
Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.